Royal Enfield Announces Rs 800 crore capital expenditure for the coming year

Royal Enfield has announced plans of spending Rs 800 crore on capital expenditure in the 2018-2019 financial year. These funds will primarily be utilized to start construction of Phase-2 of the Vallam Vadagal plant in Tamil Nadu. The firm also is keen on setting up wholly owned subsidiaries in Indonesia and Thailand in 2018-19 to capitalize on the good traction that RE's products have received, since entering those markets a couple of years ago.

Royal Enfield is also expecting its annual production capacity to go up to 950,000 units with the starting of operations at Phase-1 of the Vallam Vadagal plant and productivity optimization at its Oragadam plant.

Elaborating on this plan, Mr Siddhartha Lal, MD & CEO of Eicher Motors said that demand for Royal Enfield products continued to exceed supply and the company was seeing strong growth from all markets, which led them to expand production capacity. He stated that the company will also complete construction of its technology centre in Chennai this year, and will invest further in the development of new products to meet upcoming regulations and to expand its portfolio for global markets.

Mr Lal further went on to say that Royal Enfield will continue to strengthen its offerings with new models and variants such as the new Thunderbird X, the Classic Gunmetal Grey, Stealth Black and Redditch series, as well as the soon-to-be-introduced Twins. The firm is hoping its wide distribution network in India, a growing international presence and state-of-the-art capabilities in product development will help it grow in the middleweight motorcycle segment globally.